Economist: Lehigh Valley to recover jobs lost in recession

Region to hit new employment high by end of year, report says.

May 14, 2012|By Spencer Soper, Of The Morning Call

Lehigh Valley businesses will hire thousands of workers over the next several months, and the number of local jobs will surpass highs reached before the Great Recession hit five years ago, according to a report by Bethlehem economist Kamran Afshar.

Afshar surveys local businesses regarding their spending and hiring in the previous six months, and their projections for spending and hiring over the next six months. If his prediction holds, it means the pace of hiring will increase for the slow-moving job market.

"We expect that by summer, more companies will be looking for new employees," Afshar said. "By the end of the fall and early winter, we expect to see the local unemployment rate drop significantly. Our forecast projects local employment to reach its pre-recessionary highs by the end of the year."

The number of local jobs peaked at 346,300 in October 2007, just before the recession hit, according to seasonally adjusted figures from the state Bureau of Labor Statistics. Local jobs bottomed out two years later, in October 2009, at 331,400, a loss of nearly 15,000 jobs. In March, the Valley had 340,900 jobs, up 9,500 from October 2009 but still 5,400 shy of the pre-recession high.

Afshar expects the number of local jobs to hit 348,000 by the end of the year, which would be a new high.

"It sounds a lot better than it actually is," Afshar said. "It is a major achievement in that we are moving to a level that was not expected to happen for some time, … but we are just getting back to where we were five years ago. In those five years, a lot of new people have come to the market."

The bureau defines the Valley region as Carbon, Lehigh and Northampton counties, as well as Warren County, N.J. The Valley's unemployment rate was 7.9 percent in March.

Tony Iannelli, president of the Greater Lehigh Valley Chamber of Commerce, said Chamber members have reported that business is growing at a slow, steady pace. Rapid hiring has yet to kick in because employers want to make sure the momentum holds, he said.

"The last recession sort of caught everyone by surprise," Iannelli said. "Even though they feel business is moving forward, they are cautious about hiring."

Rising gasoline prices caused the economy and job market to sputter earlier this year. But those prices have moderated, and the economy will continue to grow, Afshar said. Many economists identified a potential spike in oil prices to be the biggest threat to the U.S. economy this year.

Professional and business services, a job category that includes lawyers and consultants, are leading the job growth, Afshar said.

A career fair last week at Coca-Cola Park in Allentown drew thousands of job-seekers and about 60 employers from various industries, including service, finance, health care, warehousing and manufacturing. Big employers recruiting included Lehigh University, KidsPeace and Wegmans.

Afshar's report indicates the Valley is pulling out of the recession faster than the rest of the country. The local housing market didn't crash nearly as hard as cities in Florida, the Midwest and the Southwest.

"We didn't fall as far down, and as a result we appear to be recovering more quickly," Afshar said.